Guttenbeil v Tower Insurance Ltd - [2012] NZHC 2106

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-5675 [2012] NZHC 2106

BETWEEN HERMAN ROBERT GUTTENBEIL AND YVONNE GAY GUTTENBEIL
First Plaintiffs

AND SARAH GUTTENBEIL AND BRENT GUTTENBEIL
Second Plaintiffs

AND XS PERFORMANCE LIMITED Third Plaintiff

AND TOWER INSURANCE LIMITED First Defendant

AND IAG NEW ZEALAND LIMITED Second Defendant

Hearing: 13 July 2012

Appearances: E Telle with L T Meys for Plaintiffs
R Hern with G Wishart for First Defendant
R Armstrong for Second Defendant

Judgment: 13 August 2012

JUDGMENT OF ASSOCIATE JUDGE R M BELL [judgment re-called and re-issued]

Solicitors:

This judgment was reissued by me on 22 August 2012 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules.
(amending paragraph [55] hereof)
...................................
Registrar/Deputy Registrar

Neilsons Lawyers (Edwin Telle/Luke Meys) P O Box 13723 Onehunga 1643, for Plaintiffs
Email: edwin@neilsonslawyers.co.nz / luke@neilsonslawyers.co.nz

McElroys (Richard Hern/G Wishart) Auckland, for First Defendant
Email: richard.hern@mcelroys.co.nz / geraldine.wishart@mcelroys.co.nz

Young Hunter (A R Armstrong) P O Box 929 Christchurch 8140 for Second Defendant
Email: ara@younghunter.co.nz

GUTTENBEIL V TOWER INSURANCE LIMITED HC AK CIV-2010-404-5675 [13 August 2012]

[1] There are cross-applications for discovery. The defendants’ joint application against the plaintiffs is largely resolved. The plaintiffs’ application against the defendants is contested. It raises these questions:

[a] Have the defendants properly listed documents in their control?

[b] Are internal documents of the defendants’ consultants and investigators in the defendants’ control?

[c] From when can the defendants claim litigation privilege?
[d] Can the defendants claim litigation privilege for witness statements? [e] Does an insurer’s duty of utmost good faith require the defendants to

disclose documents subject to litigation privilege?

[f] Have the defendants waived privilege under section 65(2) of the

Evidence Act 2006? and

[g] Have the defendants put documents in issue under section 65(3)(a) of the Evidence Act 2006?

What the case is about

[2] The plaintiffs sue Tower and IAG for claims under insurance policies.

[3] The first plaintiffs are the parents of the second plaintiffs. The first plaintiffs and their daughter, Sarah, lived at 77 Tautari Street, Orakei, Auckland. The family have a company, XS Performance Ltd, that carried on business supplying performance car parts and accessories. The plaintiffs are the only shareholders of XS Performance Ltd. Yvonne Guttenbeil is the sole director. XS Performance Ltd operated from leased premises at 431 Church Street East, Penrose, Auckland.

[4] Tower Insurance Ltd, the first defendant, is the insurer of the Guttenbeils’ family home at 77 Tautari Street. IAG, the second defendant, insured the household contents, Mrs Guttenbeil’s Chrysler car, and the business and premises of XS Performance Ltd.

[5] On 14 June 2009 the house at 77 Tautari Street was extensively damaged in a fire. The plaintiffs claimed under the insurance policies. Both defendants declined the claims. It is common ground that the cause of the fire was arson. The defendants say that the first and second plaintiffs were parties to the arson. They say that the Guttenbeils were in dire financial circumstances before the fire. Both their business and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NZHC 2106
Decision Date: 13 August 2012

CaseChat Overview and Summary

This case is a dispute between the Guttenbeils and their insurers, Tower Insurance Limited and IAG New Zealand Limited, over claims under insurance policies following a fire at the Guttenbeils' family home. The plaintiffs sued for claims under the insurance policies, while the defendants declined the claims, alleging that the fire was arson committed by the Guttenbeils. The defendants also claimed that the Guttenbeils were in dire financial circumstances before the fire, and that the house was unsaleable and could not be economically repaired. The case involves cross-applications for discovery, with the plaintiffs seeking orders for the defendants to properly and individually identify and describe each discoverable document, and the defendants seeking an order for the plaintiffs to swear an affidavit confirming the adequacy of the informal disclosure they had made.

The court considered various issues related to the discovery process, including whether the defendants properly listed documents in their control, whether internal documents of the defendants' consultants and investigators were in their control, when the defendants could claim litigation privilege, whether they could claim litigation privilege for witness statements, whether the insurer's duty of utmost good faith required the defendants to disclose documents subject to litigation privilege, whether the defendants had waived privilege under section 65(2) of the Evidence Act 2006, and whether the defendants had put documents in issue under section 65(3)(a) of the Evidence Act 2006.

The court found that the defendants had not properly listed documents in their control, as they had not separately identified and described attachments to other documents and emails, and had listed documents in groups rather than individually. The court also found that internal documents of the consultants and investigators were not within the defendants' control. The court upheld the defendants' claims for litigation privilege for documents relating to the investigation of the plaintiffs' claims, as the defendants had reasonably apprehended litigation from 16 or 17 June 2009. The court found that litigation privilege applied to witness statements, and that the statutory provisions as to privilege in the Evidence Act prevailed over any common law rules as to disclosure. The court did not find that the defendants had waived privilege under section 65(2) of the Evidence Act 2006, as the disclosure by the defendants did not go beyond that which is acceptable in the circumstances. The court also found that the defendants had not put documents in issue under section 65(3)(a) of the Evidence Act 2006.

The court made orders for the plaintiffs to file and serve a supplementary affidavit of documents as to disclosure of financial records of XS Performance Ltd, and for the defendants to file and serve a further affidavit stating whether all attachments to documents for which privilege had been claimed had already been listed and described and, if not, then separately listing and identifying those attachments. The court also directed the parties to confer as to costs on the plaintiffs' application, with leave reserved to the parties to apply for further directions as to the implementation of these orders.

Orders